Concordia Maritime reported a positive result before tax of SEK 4.1 million for the third quarter. The decline compared with the previous two quarters is due to weak income for our vessels on the open market. The market for transportation of petroleum products remained weak in the third quarter.
During late summer and autumn, there has been a temporary strengthening of some trades, but the general market upswing that we were expecting has not materialised. Unfortunately, our four vessels operating on the open market were not in a position to take advantage of the short-term “spikes” in freight rates that arose here and there.
On average, our vessels on the open market generated income of just under USD 11,000 per day in the third quarter, compared with just over USD 15,000 per day in the first half of the year. The vessels in the fleet employed on time charters generated an average of approx. USD 21,000 per day.
During the quarter, we concluded an interesting contract, a time charter for the P-MAX tanker Stena Primorsk. The contract is with a new North American customer and will run for two years with the customer’s option to extend for a further year. The daily hire is, of course, reflective of the market situation and is therefore not really satisfactory. However, this is an interesting business with a good client, and given our increased exposure to the open market, I consider it prudent to secure this cash flow. The contract is expected to generate a small surplus in the operating result (result before financial net).
The latest addition to our fleet, Stena Supreme, a suezmax type crude oil tanker, has been in operation since the beginning of July. She is employed on the open market via Stena Sonangol Suezmax Pool. The Pool achieved a relatively good result in a very challenging market in the third quarter. Stena Supreme’s share in the pool generated an income of approx. USD 17,000 per day, compared with the segment’s average rate of approx. USD 10,000 per day. This gives a positive contribution to operating cash flow (EBITDA) of approx. USD 0.8 million.
The market has strengthened significantly in early November, particularly in the Atlantic. Even if this upturn is shortlived, it means that our open vessels may generate a better income per day in the fourth quarter compared with the third. Income for the vessels employed on time charters is expected to be somewhat lower as the vessel Stena Perros was redelivered at the end of October and is now employed on the open market, while Stena Primorsk’s new contract is at a lower rate.
• Future prospects
Our assessment of the product tanker segment continues to be positive. We see indications that the market is not far away from a balance between supply and demand. The conditions are in place for a gradual improvement in the product tanker market during 2013 and 2014.
• Financial position
We continue to have a good financial position, and our available liquidity, including unutilised credit facilities, is SEK 570 (USD 87) million.
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